As China’s exports of active pharmaceutical ingredients (API) to the United States increase, concerns over drug safety are also rising, highlighting the scale of challenges facing the world’s second-largest pharmaceutical market, according to Bloomberg News.
Implications | Several US FDA warning letters to Chinese manufacturers, increasing punishments by the China Food and Drug Administration (CFDA), and lingering concerns sparked by the heparin scandal in 2008 mean that the US public's trust in Chinese API exports remains low. |
Outlook | Looking ahead, public concerns over the quality of Chinese API exports are not expected to be allayed any time soon, due to the long-term nature of the solutions required to raise domestic manufacturing standards, as well as the willingness to adhere to international standards rather than cut corners. |
According to Bloomberg News, China’s global pharmaceutical and health supplement exports rose by 3% last year to USD56 billion. The country is home to nearly 5,000 drug makers targeting the domestic market, and more than 500 pharmaceutical manufacturers registered to export to the United States.
However, over recent years a string of US FDA warning letters to Chinese manufacturers, increasing punishments by the China Food and Drug Administration (CFDA), as well as the lingering spectre of the heparin scandal in 2008, mean that the US public's trust in Chinese raw drug exports remains low.
In 2015, Chinese regulators ordered around 700 domestic drug makers to self-audit their applications for marketing approval for new treatments, and withdraw any that were incomplete or based on false data (see China: 28 July 2015: China's FDA launches campaign forcing pharmaceutical companies to self-audit clinical trial data). This led to the withdrawal of approximately 75% of the pending applications, which were either voluntarily retracted by the drug makers themselves, or turned down by the authorities.
Significantly, a number of the withdrawn applications were for treatments that had already been approved by the US FDA, with the local drug makers blaming their domestic research partners for providing unreliable data. In addition, around 80 foreign drug makers were also caught up in the self-auditing campaign, with some forced to withdraw their applications.
In addition, the US FDA has issued a string of warning letters to Chinese drug makers over the years, including most recently for a domestic manufacturing partner of Viiv Healthcare, part of GlaxoSmithKline (GSK, UK), Shanghai Desano Chemical Pharmaceutical (see China: 1 July 2016: US FDA issues warnings to Chinese drug manufacturers Shanghai Desano and Chongqing Lummy).
In 2008, counterfeit Chinese-made heparin APIs led to several deaths in the US, in a scandal that made headlines across the world and formed the bedrock of international mistrust of Chinese drugs and generics. That distrust is still felt today, as also evidenced in the continuing grey market in Hong Kong (which operates under a separate legal system from mainland China). Spurred by continuing worries over drug safety, a large number of Chinese citizens make their way to the city state every year to purchase everything from vaccines to innovative treatments (see China: 9 October 2015: High price of oncology treatments creates cut-price drugs trade in Hong Kong).
As a result of the heparin scandal, the US FDA has opened an office in China, and has engaged in increasing knowledge-sharing with local authorities (see China: 7 January 2015: China's FDA pledges to strengthen "grim" drug safety control following US warning letter).
Outlook and implications
The Chinese authorities are expected to continue their current carrot-and-stick approach to improving pharmaceutical manufacturing standards: on the one hand, issuing an increasing number of more stringent regulations on manufacturing (see China: 16 August 2016: China's CFDA releases guidance on pharma manufacturing practices); while on the other hand naming and shaming companies that do not make the grade, and continuing to launch surprise inspections.
However, the road ahead is expected to remain arduous and public concerns are not expected to be allayed any time soon. This is due to the widespread lack of adequate staff training in China when it comes to research and development (R&D) and manufacturing processes, in particular the need for transparent and accurate book-keeping.
For example, the US FDA's warning letters typically point out fairly egregious mistakes that appear to be down to deception rather than merely shoddy practices, for example, falsifying and back-dating records and lax handling methods, even at companies working in partnership with international drug firms that are, in theory, aware of the need to comply with international standards. This indicates that the challenges ahead include not only increasing supervision over thousands of small drug makers, but also increasing their willingness to adhere to international standards.
Looking ahead, it seems unlikely that there will be a swift improvement in manufacturing standards by China's domestic drug makers. Rather, it is expected to be a long, gradual road as the overall level of staff training and education rises, alongside the continued roll-out of increased supervision by the authorities. In terms of multinational pharma companies, selecting the right domestic manufacturing partner is expected to remain a somewhat risky business, although foreign imported brands to China are expected to retain their cachet and reputation of being better quality than local brands.